France: Thibault Weston Smith and Mathias Flattin have launched Crayon Partners, which they describe as the first dedicated real estate investment partner for emerging operators in Europe.
The pair have 25 years of combined real estate private equity (PE) and venture capital (VC) experience, and have launched the firm “to back the innovators who reinvent the way to buy, build and operate assets whilst shaping profitable, nature positive and socially-savvy models”.
A company statement said: “Emerging operators pioneer innovative real estate models to leverage tangible assets and tackle housing, commercial real estate, or infrastructure challenges, making them more accessible, reducing carbon emissions, or making assets more liquid. Similar to student housing and data centres in the 2000s, or coliving less than a decade ago, new transformative and innovative real estate approaches emerge over time, primarily dictated by users’ new behaviurs. The issue is that these operators struggle to attract real estate investors in their early years of operation because their track record is limited to a handful of operations (usually funded by business angels and VCs, when they allow it).”
Crayon Partners aims to bridge this funding gap by structuring its first major institutional financing (PropCo) in an OpCo-PropCo relationship with the operator. “The team identifies, calibrates, manages risks, and supports these new categories of real estate assets to become the European leaders that will transform the way we live, work, and play,” it says.
With more than 300 companies already identified in Europe, the company ays there is a growing need for real estate capital to fuel these innovative initiatives. Some of the new models Crayon Partners is focused on are rent-to-own to facilitate property ownership, equity release to unlock liquidity from homes, new low-carbon data centres” (to address the challenges of generative AI), or “parking repositioning” (to recreate value from underground space).
Mathias Flattin, who heads up the Opco side of the business, said: “Crayon Partners is driven by performance and impact, but PropTech has also taught us that transforming real estate takes time. Emerging operators offer sustainable solutions to adapt the industry to its challenges, but venture capital funding is often not suitable for these models, as it is too short-term and demanding. The OpCo-PropCo model allows the company to grow through its revenue (by financing its real estate operations) rather than relying on external capital. We unlock the growth of these future models by giving them access to institutional investor partners and family offices who trust us to qualify and structure these opportunities.”
Thibault Weston Smith, co-founder and PropCo lead, oversees the real estate investment activities across Europe. He said: “The real estate industry is changing, and we need to test new ways to buy, build and operate assets. Think out of the box. Shake up conventional wisdom. Trust bold entrepreneurs. Generate impact. Through Crayon Partners, we now have a platform to address these attractive models. We believe that our unique combination of real estate PE and VC skills allows us to select the best operators and help them build robust real estate portfolios that will attract institutional funding in the future. Pick your crayon and join us in shaping the future of the built environment.”
Crayon Partners is currently structuring its first investment, which will be announced in the coming weeks.
